Proposed changes of the Ship Flag and Ship Registers Act as well as the Income Tax Act aim to bring up to 300 large cargo vessels under the Estonian flag over the next seven years. There is currently not a single large freighter sailing under the Estonian flag, the last one having been unregistered after tax exemptions were rescinded in 2014.

According to Minister of Economic Affairs Kadri Simson (Centre), to improve its reputation as a seafaring nation as well as to boost the connected business sectors, Estonia needs to bring freighters under its flag.

The aim of 300 vessels would mean more money for the state's coffers. "It would bring €76 million in tax revenue that are currently going to other countries," the minister added.

Simson also pointed out that the package of law changes the ministry is working on for the maritime sector would also improve the standing of sailors in the social insurance system.

"Of Estonia's 1.3 million inhabitants, 10,000 are sailors, some half of which are sailing under the flag of another nation, and they often lack Estonian health insurance," Simson said. In the future, this would change, for example with the provision that upon signing an agreement with the Health Insurance Board, they would be covered at least in between jobs.

The proposed changes don't mean that Estonia is going the way of a flag of convenience and become a country that would accept ships that are in bad shape or violate international safety rules, Simson added.

The first reading of the new bill is set for today 7 November, when the Riigikogu will discuss the package in its plenary sitting and vote on whether or not work on the law changes will continue. Should the tax changes suggested in the package be passed, Estonia would also need the green light of the European Commission, as the proposed changes are subject to EU revision concerning state support for certain industries.

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